The Spanish Prime Minister’s plans for fresh economic stimulus measures have come in for harsh criticism from the political opposition.
José Luis Rodriguez Zapatero, watched by his rival Mariano Rajoy, used his annual state of the nation address in Parliament to outline a plan aimed in part at addressing the country’s soaring unemployment:
“We plan to reduce business tax for small firms… a reduction of five percent over three years for companies with less than 25 employees and with profits under five million euros.”
Responding to the speech, Rajoy accused Zapatero and his government of hiding the extent of the crisis:
“You won’t listen to anyone. Not me, not the IMF, not the EU, not the Bank of Spain, not the economic experts who know what they are talking about.”
Unemployment in Spain has soared to more than 17 percent, the highest in the EU.
Tax breaks on house purchases will be phased out for all but low earners in two years time – to encourage people to buy now. With the collapse of the housing bubble – blamed by many for Spain’s current situation – there are around 600 thousand unsold properties.